Designing Cash Transfer Programs for an Older Population
The Mexican Case
Published in: The Journal of the Economics of Ageing, Volume 9 (June 2017), Pages 111-121. doi: 10.1016/j.jeoa.2016.09.001
Posted on RAND.org on June 28, 2017
Aging populations and the prevalence of poverty in old age have led to the introduction of noncontributory pensions in many countries. We consider a number of alternative targeting approaches and simulate their effects in an empirical application in the State of Yucatan, Mexico. We compare the approaches with respect to leakage, under-coverage, and their effects on government budgets. We are also able to compare the simulated effects of one alternative with the observed effect of a recently introduced demogrant and find that the simulation is a close approximation of the empirical outcomes. We discuss issues of implementation and political feasibility.